Eric Ham: Border issues a potential derailment to CUSMA extension

Canada's Prime Minister Mark Carney, listens as U.S. President Donald Trump speaks during a group photo at the G7 Summit, June 16, 2025, in Kananaskis, Canada. (AP Photo/Mark Schiefelbein)

Eric Ham is based in Washington, D.C. and is a political analyst for CTV News. He’s a bestselling author and former congressional staffer in the U.S. Congress and writes for CTVNews.ca.

Recent testimony by FBI Director Kash Patel before the House Oversight Committee offers a window into what could be the central issue to potentially see the United States withdraw from Canada-U.S.-Mexico Free Trade agreement (CUSMA).

Responding to a question about the risk of terrorism posed by illegal border crossings from the north, Patel said that while there has been a drop in suspected terrorist crossings from the southern border, there has been an increase in crossings from the north.

The MAGA firebrand stated, “we need more focus on the northern border” suggesting terrorists are originating from China, Russia, the Middle East, and Africa.

Since returning to office, U.S. President Donald Trump has accused Canada of allowing record amounts of fentanyl to illegally cross into the U.S.

Now a key administration figure has highlighted a very real problem vexing both nations, which could lead to enormous concessions from Ottawa and perhaps even more destabilizing, Trump walking away entirely from more than six decades of economic integration.

‘Potentially hazardous back and forth’

Trade negotiations between Canada and the U.S. have stalled and Prime Minister Mark Carney, says any future negotiations will now take place throughout the review of CUSMA. This could make for a very intense and potentially hazardous back and forth as the Trump Administration places the threat of terrorism at the forefront of its many priorities.

While Canada and Mexico may have initially thought negotiations on a new regional free trade agreement would be pro forma, the hostility emanating from the Trump White House towards its southern and northern neighbours indicates anything but as the review process moves forward.

Moreover, much like Trump threatened to walk away from NAFTA during negotiations in 2018 and having already walked away from negotiations this year, the often-capricious Chief Executive has made clear he is willing to do it again.

According to a 2023 Department of Homeland Security strategy document, potential terror threats are primarily from “homegrown violent extremists in Canada who are not included in the U.S. government’s consolidated terrorist watch list and could therefore enter the United States legally.”

Moreover, a letter sent to the Department of Homeland Security in July 2024 by Senators Ted Cruz and Marco Rubio warned about a rise in suspected terrorist encounters at the northern border, noting that the possibility of terrorists crossing from Canada was “deeply concerning.”

Therefore, the spectre of foreign terrorists entering the United States will guide the Trump Administration as they look to next steps on trade with Canada. Recognizing the threat and to combat any potential rise in illegal border crossings and root out terrorism on the northern border, the Canadian government has committed $1.3 billion for more personnel, new technology, and enhanced equipment for the Canada Border Services Agency.

Additionally, Bill C-2, The Strong Border Act is intended to update immigration laws to bolster border security and address national security threats.

‘At what price?’

This all comes on the heels of a record number of terrorists trying to enter the U.S. from Canada in 2024. U.S. Border Patrol data states that 358 suspects on the terror watchlist were arrested on the northern border at ports of entry in fiscal year 2024.

Contrast those numbers with the southern border, which saw less than half of that. A total of 155 suspects were encountered in fiscal year 2024.

Canadian scholar Christopher Sands says, “…before 9/11, border security had been a U.S. priority addressed outside of trade agreements, and I think that the U.S. will want to incorporate commitments in the agreement itself this round.”

Yet it is unclear what the president might be seeking in the form of commitments and at what price? As all three nations gear up for what could be a consequential negotiation; three options stand before all three parties; 1) renewal 2) extension 3) withdrawal. While no government has formally signalled an intention to walk away, expect Washington to use it as a bargaining chip.

Withdrawal triggers immediate trade disruption and likely provokes retaliatory measures, compounding economic uncertainty, harming cross-border industries, and raising tensions between parties. It would also mark a strategic shift away from regional integration, with severe consequences for the three nation’s overall competitiveness.

Yet based on Trump’s continued ratcheting up of the tariff fight on goods coming into the U.S. from Canada, it does appear withdrawal and a complete disruption of regional economic integration are not out of the realm of possibility.